As the U.S. braces for another intense hurricane and wildfire season, a new concern is emerging—not from environmental threats, but from federal budget decisions.
Major funding reductions and layoffs at the National Oceanic and Atmospheric Administration (NOAA) are drawing serious concern across the property and casualty insurance sector.
NOAA, which oversees the National Weather Service (NWS), plays a vital role in supplying the baseline data insurers use to assess and price climate-related risks.
Satellite imagery, wildfire data, storm tracking, and floodplain maps feed directly into actuarial models used for underwriting. Without consistent, high-quality input, the industry’s ability to forecast risk declines—forcing insurers to adjust prices or reduce coverage in affected markets.
Gregg Barrett, CEO of Waterstreet Company, which provides technology solutions to insurers, said the changes are already affecting operations.
Cuts to NOAA and similar agencies absolutely affect insurance underwriting and prediction. Without the raw data—storm patterns, flood mapping, wildfire trends—our ability to model risk and price products begins to erode.
Gregg Barrett, CEO of Waterstreet Company
In April, NOAA quietly stopped updating its widely referenced Billion-Dollar Weather and Climate Disasters database.
Since 1980, the dataset has tracked major weather events and their financial toll, serving as a benchmark for both insured and uninsured losses.
Its discontinuation removes what many consider the most reliable national record of catastrophe costs. A May 2025 report highlighted the decision as a major setback for risk analytics across the sector.
This shift comes in the wake of mass layoffs across NOAA, driven by the newly created Department of Government Efficiency (DOGE) and proposed fiscal 2026 budget cuts.
DOGE canceled or altered 189 NOAA contracts, valued at $117 mn, claiming $35 mn in projected savings. The National Weather Service has taken the largest hit, with about 1,029 job losses—approximately 8.6% of its total workforce. Nearly 600 of those were attributed to layoffs or early retirements.
The impact is immediate. Many forecast offices now operate under reduced hours. Some have suspended overnight staffing or canceled weather balloon launches, which are essential for modeling storm systems.
Several locations report vacancy rates over 35%, leading to delays in weather alerts and diminished real-time monitoring capabilities.
NOAA has acknowledged the strain and is attempting to stabilize operations. It plans to hire 125 new staff in key roles—meteorologists, hydrologists, physical scientists, and electronics technicians.
These hires are targeted at restoring core forecasting capacity in areas where service degradation is already evident.
Barrett warned of the industry-wide consequences: “When the data gets thinner or delayed, we lose precision. That forces carriers to become more conservative in their assumptions, often resulting in higher premiums, reduced policy availability, or full withdrawal from high-risk areas.”
Meteorologists, weather broadcasters, and mobile apps all rely on NWS data to inform the public. Undermining NOAA’s infrastructure threatens public safety, weakens economic resilience, and disrupts climate research efforts.
While Congress has yet to finalize NOAA’s budget, insurers are already modeling scenarios based on degraded data availability.
In a risk environment increasingly shaped by climate volatility, the loss of foundational federal infrastructure is forcing a recalibration of assumptions, pricing, and long-term exposure.
